Retirement tax questions

Withdrawals from a pre-tax 401k are always taxable.  In most cases, you also pay a 10% penalty if you are under age 59-1/2.  There are a few exceptions to the penalty, but the only one that might apply to you is you can exclude $1000 from the penalty for a personal emergency.  But if you withdrew more than $1000, you pay the penalty on the rest and tax on all of it.

 

Even though your plan may allow a hardship withdrawal, it is still taxable. 

 

If you have left the company, you can withdraw for any reason (you do not have to prove a hardship) but you still pay income tax and penalties.